AAPA, the American Medical Association (AMA), and a host of other physician and non-physician health care societies and organizations signed onto a letter urging Congress to fix the Medicare payment formula to bring needed stability to the payment sytem that covers 43 million beneficiaries. In the minds of many organizations, the volatility in the fee schedule threatens to disrupt access to care for many Medicare beneficiaries.

Annual updates in the Medicare fee schedule are governed by a formula called the Sustainable Growth Rate (SGR). In each of the last few years, the SGR has dictated a cut in the Medicare fee schedule of approximately five percent. Intense lobbying by AAPA, the AMA, and other organizations has convinced Congress to stave off the cuts. But the future does not look promising. Based on the curren SGR projections, the fee schedule is expected to decrease by some 37 percent over the next six years.

AAPA and others want to find a permanent fix to the SGR that will recognize that the cost of providing health care is constantly increasing and the fee schedule must recognize that fact. Simply put, the letter to Congress asks for a payment update methodology that reflects legitimate increases in practice costs. The present SGR is based on a number of factors such as the increase or decrease in the US Gross Domestic Product and the cost of certain physician administered pharmaceuticals, both of which are completely out of the control of health care professionals.

Medicare Pay Increase Could Improve Patient Care
A Medicare payment increase for hemoglobin A1C testing may improve patient care by encouraging health care professionals to test at the point of care, such as in the office, instead of sending patients to off-site labes for testing. In the past, low payment rates made it less financially desirable for the test to be performed in the office or clinic setting. The payment rate increased from approx. $13.50 to just over $21.00. The assumption is that obtaining results in the office will lead to faster, more coordinated treatment for diabetic patients.

How Do You Rate?
The issue of improving quality of care has been a hot topic in medicine for quite some time. Over the past few years, the term pay for performance, also known as P4P, has been used to describe a system in which health care professionals who deliver the best care should receive some type of financial bonus. Private third party payers and the Medicare program have been searching for ways to provide financial and other incentives to health care professionals if those professionals can demonstrate that they deliver the highest quality care to patients in relation to their peers.

The notion of delivering the best quality care to patients is an accepted principle. However, defining quality and making useful comparison between health care professionals has always been a difficult process. A number of private prayers are beginning to rank physician in terms of performance. The payers will publish lists to patients ranking physicians as being high or low “performers”. But some physicians feel that certain private payers are engaging in a practice known as economic profiling.

Instead of a ranking based on the quality of care provided to patients, the ranking deals more with which physicians cost the health plan the least amount of money by ordering fewer tests, asking for fewer consultations, or prescribing fewer medications. Regence Blue Shield in Washington state and United Healthcare in Missouri and Louisiana have had complaints filed against them by physicians who believe that the payer is using the concept of improved quality to force physicians to make patients care decisions based on costs as opposed to what is in the best interest of the patient.

Both Regence and United Healthcare decided to cancel, at leat for now, their programs to rate physicians in this manner. However, two other large payers in the market. Aetna and Cigna, have plans to rate physicians. The hope is that true quality of care provided to patients will be the driving force with these new ranking sytems. AAPA will continue to monitor this payer activity generally, and specifically in relation to PAs.

A Temporary Reprieve is Possible, but Don’t Count On It
You will no doubt get tired of hearing it, and I’ll get tired of writing it. But I feel compelled to keep reminding you that the deadline for obtaining your National Provider Indentifier (NPI) number is growing near. May 23 is the date specified by the Centers for Medicare and Medicaid Services (CMS) by which all health care professionals who submit claims to any payer for their services, or who engage in any electronic transfer of health care information, such as ordering consults or ordering DME, must have an NPI number.

This 10-digit number will replace all other identifying numbers that you currently have with any payer in the country. It will be the one number that will stay with you for life (and quite possibly into the afterlife).

Because of the magnitude of this effor (some 2.5 million health care professionals and entities need to have NPI numbers by the deadline), some are suggesting that CMS delay the final implementation beyond May 23. In addition, CMS has yet to issue more detailed instructions about certain aspects of the NPI system. Some are suggesting a six-month delay, while others think a 12-month delay is more reasonable. CMS has yet to say if a delay is forthcoming. However, even if there is a delay in final implementation, the prevailing sentiment is that an NPI number must be obtained by May 23, but that the old Medicare PINs could still be used for billing and other purposes until all the bugs are worked out of the NPI system.

You may apply for the NPI on line at https://nppes.cms.hhs.gov. The process takes about 20 minutes to complete. Make sure that you have your state licnense (certification or registration) number and your existing Medicare Provider Identification number. Also, check with your employer’s billing office to make sure that your employer has not already applied for NPI.

From the American Academy of Physician Assistants' "Reimbursement Watch" a bi-monthly newsletter written by Michael Powe, AAPA Director of Health Systems and Reimbursement Policy.